Did the Administration Conceal the Fact That Millions Would Have to Replace Their Insurance With A New Policy?

At the end of October NBC’s Lisa Myers and Hannah Rappleye broke the story: “millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, say experts, and the Obama administration has known that for at least three years. Four sources deeply involved in the Affordable Care Act tell NBC News that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a ‘cancellation’” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience ‘sticker shock.’

“Buried in Obamacare regulations from July 2010,” Myers and Rappleye reported, “is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.”

In fact, NBC’s investigative team did not t need four unnamed sources “deeply involvthe ACA” to tip them off that millions of customers would be receiving these notices.

Three years earlier Health & Human Services (HHS) Secretary Kathleen Sebelius had called a press conference to announce that under the ACA, 43 million Americans working for small companies” would be moving to new plans.   Labor Secretary Hilda Solis joined her to explain that the new plans would give workers “all of the protections of Obamacare.” 

In a press release HHS spelled out the numbers: “roughly 42 million people insured through small businesses will likely transition from their current plan to one with the new Affordable Care Act protections over the next few years,” along with “17 million who are covered in the individual health insurance market.”  .

What about President Obama’s promise that “If you like your plan you can keep it”?  As I explain it the post above, when he first made this pledge, he was addressing “the majority” of insured Americans who worked for a large companies where they received generous benefits. These were the folks who “liked their plans,” and in a debate with Senator McCain, he was reassuring them that health reform would not mean dismantling employer-based insurance and moving to a single-payer system. But over time, candidate Obama made the mistake of letting his pledge turn into a sound bite. At that point, it became easy for his opponents rip that line out of its original context, and brand him a liar.

In 2013, when reporters claimed that people who received the “cancellation letters” were blind-sided, they ignored the fact people in the individual market often lost their policies. As HHS observed in its 2010 press release: “roughly 40% to two-thirds of people in the individual market normally change plans within a year,”  in part because carriers in that market routinely discontinued  policies.  Inevitably, the replacements they offered costs more and/or covered less. As a result,  Americans who purchased their own insurance were accustomed to scrambling, year after year, to find new coverage.  In the fall of 2013, neither they, nor reporters who knew anything about the individual market, should have been shocked when so many policy-holders discovered that they would not be able to renew their plans..

Was the News “Buried” In Obscure Obamacare Regulations?

Hardly. The New York Times covered the press conference in its A1 section, noting that, “the rules appear to fall short of the sweeping commitments President Obama made while trying to reassure the public” that they “could keep their current coverage if they like it.”  But, as the Times reported, the administration explained that  “this was just one goal of the legislation.” Another goal was to make sure, as Labor Secretary Hilda Solis put it when responding to a question “that insurers don’t take advantage of their customers.” 

Originally, the Affordable Care Act had stipulated that if an insurer sold a plan before March 2010, when the ACA passed, the carrier could continue to renew that plan—even if it didn’t meet the ACA’s standards. But reformers did not want to give carriers carte blanche. As Sebelius explained at the press conference: If, after 2010, insurers (or employers) made dramatic changes to a plan, hiking deductibles or reducing benefits (“for instance, deciding to stop covering  treatments for say, HIV/AIDS or cystic fibrosis,”)  it would be considered a new plan.  At that point, the insurer would no longer be able to renew the policy and would have offer a replacement that met the ACA’s requirements for consumer protection.

Back in June 2010 the New York Times was not the only major media outlet that publicizing the rules: Fox News issued a “Special Report,” which claimed that “up to 80 percent of small businesses and 64 percent of large businesses may have to give up the plans they had today within three years,” The Report even included a video of Sebelius making the announcement.

Yet in October of 2013 Fox would claim that the press conference never happened.  On Fox & Friends, co-host Steve Doocy charged that the administration hid the facts.  “Back in 2010, they knew millions would lose [their coverage], and they didn’t say a word!”

Okay, I understand that most folks at Fox don’t start their day by skimming the New York Times. But don’t they watch Fox News?

                              Media Matters Sets the Record Straight

Fox & NBC were not alone. Most media pundits feigned surprise and shock when small companies and individuals learned that . (Or perhaps they weren’t feigning.  I’m beginning to realize that many reporters don’t follow the news about health care policy. Often they are more interested in the politics, and the polls,  than in the substance of the law.

On October 29, 2013, the day after NBC aired the original story, Media Matters called them out:   

—  NBC’s Lisa Myers and Hannah Rappleye misleadingly reported that Obama did not previously disclose his knowledge that many consumers might not be able to keep their original health insurance plans, ignoring the fact that this was announced by his administration in 2010. 

—  “An October 29 USA Today article hyped the misleading NBC report, claiming that the White House knew insurance plans would be canceled under the ACA, but does not include the important fact that this information was made public in 2010: 

—  “CNN’s Ashleigh Banfield Claims “The Administration ‘Didn’t Saying Anything’ About Some Policies Changing.” To his great credit credit, CNN correspondent Joe Johns corrected her, explaining that “in truth,this story’s been around a long time.  But Banfield shouted him down.

— “CBS News reported that the fact some individuals would have policies change under the law was “an unexpected reality of Obamacare”:

—  Wash. Times: White House “Acknowledged For the First Time Monday” That Some Consumers Will Need To Switch Plans.

—  “Fox News’ Steve Doocy: Back In 2010, They Knew Millions Would Lose”  [their coverage] And They Didn’t Say A Word’.”

Who “lied”—Fox News or President Obama?




8 thoughts on “Did the Administration Conceal the Fact That Millions Would Have to Replace Their Insurance With A New Policy?

  1. This is totally stupid and nothing but politics! We just changed policies and know what? We’re saving about $300 a month. Our original policy was comprehensive insurance, we bought almost the same thing . We pay 100% of our premium and are not complaining about some savings. We didn’t go through the exchange because it’s from the same carrier and they had a nice website and a customer rep, so I can’t comment on how well that works. We just hope the rates don’t pop up next year.

    • Ginger-

      I’m glad you’re saving. Many people are–even those who don’t qualify for subsidies.

  2. Maggie, can you shed some light on this?
    I contacted Larry Levitt about this quote:
    “But while those policies, by and large, had been canceled because they did not meet the law’s requirements for minimum coverage, many of the New York policies being canceled meet and often exceed the standards, brokers say. The rationale for disqualifying those policies, said Larry Levitt, a health policy expert at the Kaiser Family Foundation, was to prevent associations from selling insurance to healthy members who are needed to keep the new health exchanges financially viable.”
    I had been under the impression that such plans were being canceled because they did not meet minimum value standards. Mr. Levitt did not really answer my question because he got sidetracked on a different issue. When I emailed him again he did not answer (he’s a busy man). Are some of these plans being canceled even if they meet minimum value just to get these folks into the bigger pool?

    • Martha-

      I think I understand what he’s saying –and why he is saying it–but clearly his quote was torn out of context.

      The NYT piece is not very good (I live in Manhattan. It simply is not true that “many of these policies were as good as or better than” policies available in the Exchanges.” At one point I had one of these “professional organization” policies. It was very expensive, and not that good. It didn’t cover some care that I needed

      If the exchanges had existed, I would have been much better off in the Exchange.
      Most people who are free-lance writers, musicians , etc. cannot affords $1,000 for individual coverage–what the lawyer quoted in the story paid for her old coverage.

      She is over-paying for doctors and hospitals that over-charge.
      Medical research shows no correlation between what providers charge and quality of care.

      I will try to contact Larry Levitt and ask him to elaborate on what he actually said.

      Do you have a good email or phone number for him?

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